Coca Cola 2004 Annual Report Download - page 55

We fund our U.S. qualified pension plans in accordance with Employee Retirement Income Security Act
regulations for the minimum annual required contribution and in accordance with Internal Revenue Service
regulations for the maximum annual allowable tax deduction. The minimum required contribution for our primary
qualified U.S. pension plan for the 2005 plan year is $0 and is anticipated to remain $0 for at least the next several
years due to large contributions made to the plan over the past four years. Therefore, we did not include any
amounts as a contractual obligation in the above table. We do however, anticipate contributing up to the maximum
deductible amount to the primary U.S. qualified pension plan in 2005, which is estimated to be approximately
$59 million. Furthermore, we expect to contribute up to $9 million to the U.S. postretirement health care benefit
plan during 2005. We generally expect to fund all future contributions with cash flows from operations.
Our international pension plans are funded in accordance with local laws and income tax regulations. We
do not expect contributions to these plans to be material in 2005 or thereafter. Therefore, no amounts have been
included in the table above.
As of December 31, 2004, the projected benefit obligation of the U.S. qualified pension plans was
$1,458 million, and the fair value of plan assets was $1,729 million. As of December 31, 2004, the projected
benefit obligation of all pension plans other than the U.S. qualified pension plans was $1,342 million, and the
fair value of all other pension plan assets was $668 million. The majority of this underfunding is attributable to
an international pension plan for certain non-U.S. employees that is unfunded due to tax law restrictions, as well
as our unfunded U.S. nonqualified pension plans. These U.S. nonqualified pension plans provide, for certain
members of management, benefits that are not permitted to be funded through a qualified plan because of limits
imposed by the Internal Revenue Code. Disclosure of amounts in the above table regarding expected benefit
payments for our unfunded pension plans and our other postretirement benefit plans cannot be properly
reflected for 2010 and thereafter due to the ongoing nature of the obligations of these plans. However, in order
to inform the reader about expected benefit payments for these plans over the next several years, we anticipate
annual benefit payments to be in the range of approximately $50 million to $60 million in 2005 and remain at or
near this annual level for the next several years.
Deferred income tax liabilities as of December 31, 2004 were $450 million. Refer to Note 15. This amount is
not included in the total contractual obligations table because we believe this presentation would not be
meaningful. Deferred income tax liabilities are calculated based on temporary differences between the tax basis
of assets and liabilities and their book basis, which will result in taxable amounts in future years when the book
basis is settled. The results of these calculations do not have any connection with the amount of cash taxes to be
paid in any future periods. As a result, scheduling deferred income tax liabilities as payments due by period
could be misleading because this scheduling would not relate to liquidity needs.
Minority interests of $213 million as of December 31, 2004 for consolidated entities in which we do not have
a 100 percent ownership interest were recorded in the consolidated balance sheet line item other liabilities. Such
minority interests are not liabilities requiring the use of cash or other resources; therefore, this amount is
excluded from the contractual obligations table.
Exchange
Our international operations are subject to certain opportunities and risks, including currency fluctuations
and governmental actions. We closely monitor our operations in each country and seek to adopt appropriate
strategies that are responsive to changing economic and political environments and to fluctuations in
foreign currencies.
We use 47 functional currencies. Due to our global operations, weaknesses in some of these currencies are
often offset by strengths in others. In 2004, 2003 and 2002, the weighted-average exchange rates for foreign
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